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Tammy And The Donald

The title refers to escapades economic rather than sexual. Tammy is Wisconsin’s Democrat junior senator, surname Baldwin, who is running for reelection this year. The Donald is undoing his previous good work on corporate and personal taxes by raising the excise taxes called tariffs. It might cause a trade war. It is certainly not well received in the equity markets.

Trump said this week he’ll slap 25% tariffs on $50 billion to $60 billion in Chinese exports to the U.S., including aerospace, information and communication technology, and machinery. The move is aimed at countering Chinese cyber and intellectual property theft of U.S. technology. It also tries to push back against China’s demands for technology transfers from U.S. companies in return for access to China’s market.

She is trying to move The Donald even more into the protectionist camp. We see her touting her buy [more expensive] American in her TV ads. Here is a press release that explains her position:

“We need to put America to work rebuilding our infrastructure and strong Buy American standards need to be at the foundation of any plan. Taxpayer money should not be spent on foreign steel from Russia and China. American workers need to rebuild our infrastructure with Made in America products,”

Of course, increasing tariffs and buying American are two sides of the same coin. In both cases you are charging all Americans more to benefit a few Americans and harm other Americans. There is no reason that we can’t work on infrastructure without without paying economic rents Tammy’s friends.

Sidebar: Tammy chided the administration for not being explicit about buy American in their infrastructure proposals. We can’t find the WSJ op-ed on the cost of American infrastructure but we would support eliminating all restrictions on infrastructure projects so Americans can get full value for their tax dollars. Tammy wants the opposite: high prices for everyone with the benefits going to her favored few. End Sidebar.

We hope that Tammy and The Donald don’t end up in the same political bed on buy American. We hope that the GOP can find a good replacement for her. Tammy’s actions reveal that the Democrats are highly unlikely will have a better replacement for The Donald in 2020 or 2024.